Six predictions for vacation rentals for 2019

What will 2019 bring? It’s time to take a deep breath and make some predictions.

HERE ARE MY TOP SIX PREDICTIONS: 1 Direct bookings will grow for smart VR owners, with better tools emerging.
2 Channel managers will take the stress out of instant booking
3 Booking.com will continue to grow
4 Regulators will target anti competitive practices.
5 Airbnb will stall but reinvent itself, and allied services will grow
6 The lesser OTAs will wane

1 Direct bookings will grow for smart VR owners, with better tools emerging.
In the same way that awareness of Airbnb grew from 15% to 80% over just two years, more and more insightful guests are becoming aware they can save around 10% by booking direct with the owners of their accommodation.
Smart owners realise this and are using better tools to make it easy to get direct bookings. It will be easier to have your own website, with links to your own booking engine software so guests can easily book direct online.

2 Channel managers will take the stress out of instant booking
Three years ago only a handful of channel managers were connected to Airbnb, now all the OTAs make it easier for many channel managers to connect. Soon there will be scores of channel managers available that can synchronise all owners’ calendars, and avoid the dreaded double booking. Owners will be able to relax and adopt instant booking on Airbnb, Homeaway and Tripadvisor as well as the Bookingdotcom default. Instant booking means higher ranking and more bookings, so it will become the norm.
The extra competition between channel managers will drive prices down, becoming affordable even for single property operators. I missed that trend last year!

3 Booking.com will continue to grow
As more vacation rental owners find it easy to use Booking to travel themselves, they will see the potential to use it to bring more bookings to their own VR, and will sign up, increasing Booking supply. The virtuous cycle of success will continue with more choice driving more bookings. Already dominating Google ads spend with over $1 Billion per quarter, Booking and other OTAs will further seal their market dominance.

4 Regulators will target anti competitive practices.
Regulators, particularly in Europe will become sensitive to how OTAs have used their market strength to crush small operators by dominating Google ads, and in the case of Booking, by imposing price fixing through price parity clauses in agreements. The more active regulators will wind back price fixing practices.

5 Airbnb will stall but reinvent itself, and allied services will grow
As Airbnb soaks up available supply in the small property market, it’s growth will stall, exacerbated by regulation limiting activity in urban areas. Using its strength of innovation, it will find ways to add small hotels to its inventory by making it easy for them to connect to the Airbnb ecosystem, and rewarding them for joining. The distraction of growth may well delay the much awaited IPO another year.
The number of providers of allied Airbnb service providers will continue to grow to fill gaps needed by owners. This will include key provision, meet and greet, cleaning and entire property management services. Airbnb will continue to provide tools to make integration easy for service providers and owners.

6 The lesser OTAs will wane
The less competitive OTAs will stall as they deliver less bookings than their more successful counterparts. Tripadvisor will have trouble surviving and will continue to shed value until its price declines enough for it to be purchased by one of the larger OTAs. The Homeaway brand will continue to struggle. The trends for OTAs were clear in my previous post here.